Cloud adoption reaches tipping point in SA

Apr 15, 2016

Kathy Gibson reports from the SAP HEC launch in Johannesburg – Cloud computing initiatives are seeing rapid acceleration in the local market, says Clinton Jacobs, analyst at BMITechknowledge.
The local analyst firm has recently completed its Data Centre and Cloud Infrastructure study, which estimates that the cloud market to grow from R2,5-billion in 2015 to about R6,4-billion by 2020.
BMI-T defines cloud as offering on-demand service, broad network access, resource pooling, rapid elasticity and measured service.
“Have we reached a tipping point in South Africa for cloud services?” Jacobs asks.
BMI-T calculates there are is about 50 000 square metres of white space available in data centres in South Africa, excluding banks and public sector at about a 60% utilisation. This means there is about 20 000 square metres of un-utilised space, Jacobs points out. And there is more being built.
“So there is plenty of availability,” Jacobs says. “So we think the data centre space is primed for cloud computing.”
Power plays a huge role in the decision to adopt cloud computing, with racks becoming smear, more dense and more power hungry.
Connectivity has traditionally been an objection to cloud adoption. “But what we’ve seen since about 2005, and accelerating, is that there is no longer a near-monopoly on fibre. In fact, there are around 26 000km of private sector metro fibre already installed.
“So connectivity between data centres and to the business is no longer really an issue.”
Wireless has also become a more viable option, with the proliferation of wireless links now available.
“So the environment is really ready for cloud computing.”
Jacobs points out that there is a definite observed journey to the cloud. “Customers are not leaping into the cloud, but taking on the process thoughtfully.”
Typically, customers are starting with the communication platforms, also developing and testing environments.
“One of the key aspects is that there is flexibility. Today, flexibility and the ability to have a utilisation-based model is gaining popularity,” Jacobs says.
“There is also a feeling that cloud is not necessarily for everyone. There is a recognition that there will be a hybrid cloud environment, especially in the larger corporates.”
A key theme from the study relates to the Gartner idea of bimodal IT. “This means being able to be stable in operations, but agile enough to adopt and build innovation into the business,” Jacobs says.
“One needs to be innovative, so the approach of a bimodal approach to IT is gaining traction.”
BMI-T is seeing that companies that are too operationally focused tend to be stuck in the traditional environment; those that are more innovative are looking to cloud computing to be more agile and gain competitive advantage.
“Cost reduction is key in this environment,” Jacobs adds. “Companies expect their ICT providers to come to the party to help them in this time. They expect to spend the same or less on IT, but gain much more value, with reliability and value.
“There is also move from capex (capital expenditure) to opex (operational expenditure) – consumption is the new currency.”
Skills are a problem throughout the industry. “The problem of the skills shortage has overtaken security as the key challenge in IT delivery,” says Jacobs.
The first consideration is what to do with existing resources when companies move to cloud environment. “How do I retool my resources; ad how can I get more innovative?”
The new environments are also quite complex, he points out, so people will need to acquire new skills.
Moving workloads to the cloud is a big move for companies, and Jacobs points out that trust is a huge issue.
“Companies need to trust their provider sin terms of the product, but also in terms of getting the services up and running. Trust really is key.”
Disaster recovery is another key drive, with cloud computing changing the landscape here as well. Disaster recovery as a service allows companies to spin up new instances quickly and relatively easily.
Big data, analytics and mobility are huge topics in the market. “There is exponential growth of data,” Jacobs says. “But it’s useless just having data without having analytics as well. The key for this lies in analysing data to create new value and opportunities.
“Of course, everyone wants the answers wherever they are, so it needs to be in realtime.”
The challenges are led by the economic environment, which fosters uncertainty and thus impacts on decision-making. “Companies are sweating their assets and hanging on to their legacy,” Jacobs says. “But as these systems come to end of life, cloud is a very real option going forward.”
Many South African companies are also still very operationally focused, Jacobs ads, and not as mature as they could be. “This has improved a lot, but it is still a challenge.”
Aligned to this is the fact that key issues are often only recognised quite late in the cloud adoption phase.
A challenge for IT is the fact that line of business managers tend to be taking decisions about IT and cloud adoption independently of IT.
The responsibilities of the various players need to be understood and aligned, Jacobs adds.
Data sovereignty has been a challenge in the past, but this is rapidly falling of the radar as compliance becomes universal.
We are seeing the emergence of regulations relating to the cloud environment. PoPI talks about data; and now the Reserve Bank and SARS have both issue guidelines for cloud adoption.
“But the best form of protection is still largely self-regulated,”” Jacobs says. Companies need to ensure that they understand the different contracts relating to transmission, the cloud infrastructure, cloud managed services, and application management.
Security remains one of the key elements in any IT discussion. As it relates to cloud, the key drivers are internal audit, legislation, incidents, structured approaches and the skills shortage.
“But service providers have solved many of these issues,” Jacobs says. “They are turning what was an objection to cloud computing into a real value proposition.”
While SMEs may migrate quickly to third party clouds, enterprises will tend to adopt a hybrid cloud approach, BMI-T believes.